Online loan calculators will never understand the needs of borrowers
Online loan calculators will never understand the needs and the unique situation
of an individual borrower and advertising such products will not benefit
consumers, according Tony Harris, NSW General Manager of NCF – The Money Store.

“The recent advertising guidelines released by the Mortgage Industry Association
of Australia serve to remind brokers that promoting products such as online
calculators can potentially mislead consumers,” said Harris.

“These guidelines certainly hit the mark but most would-be borrowers already
have the common sense not to rely on a calculator on the internet to decide
which type of loan will most suit their circumstances.

“Online calculators on the internet are often designed to promote so-called
mortgage minimisations schemes, which involve refinancing the loan with a line
of credit - the line of credit is a ‘come and go’ facility where interest is
calculated daily on the outstanding balance and charged monthly.

“A loan such as this will not benefit many borrowers and can also be relatively
complicated and misleading. It is therefore essential that consumers rely on a
mortgage broker to make an independent assessment about these types of loan
products in relation to the consumer’s individual circumstances.

“Whilst advertising guidelines for brokers are important, the real message to
borrowers should be to make sure they seek proper advice from a professional
mortgage broker when making important decision about their mortgage.

“The fact is that online calculators can’t take into account a range of factors
that must be considered when deciding which loan products are most suitable for
each borrower.

“Once again, this also highlights the need for the mortgage brokerage industry
to be regulated on a national level. National regulations would more effectively
deal with these types of issues, while compliance with a different set of rules
in each state will only confuse mortgage brokers and consumers alike,” said
Harris.

Tony Harris is the NSW General Manager of NCF-The Money Store, which is part of
Terrain Australia Limited, Australia’s first publicly listed mortgage finance
company. Harris is an Associate of the Mortgage Industry Association of
Australia (MIAA) & Associate of the Australian Property Institute (API).
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